By: Adam Millsap featuring IWF President Carrie Lukas
Last week it was reported that the California Labor Commissioner’s office sued its first company to enforce Assembly Bill 5 (AB5), the state’s 2019 law that requires a three part test to determine whether a worker is allowed to be an independent contractor. AB5 has caused thousands of independent contractors throughout California to lose their incomes, but that hasn’t stopped other states or federal politicians from trying to implement similar misguided policies in the name of protecting workers. Covid-19 has shown us that we need more resilient and flexible labor markets, not more rigid ones, and regulations that make it harder for people to work as independent contractors move us in the wrong direction.
The defendant in this case—Mobile Wash Inc.—is an on-demand car wash company that fits the gig-economy profile that proponents of AB5 and similar rules often target. Mobile Wash’s app allows customers to order car washes and detailing at a location the customer chooses (e.g. their home or work) from various providers. Mobile Wash is accused of misclassifying workers, failing to register as a car wash employer, failing to pay minimum wage, and failing to offer non-wage benefits such as sick leave, among other things.
A flexible work schedule is especially valuable to parents. As Carrie Lukas, president of Independent Women’s Forum, has noted:
“A generation ago, when a woman had a baby, she typically had to make a black and white choice of whether to go back to traditionally formatted work or to quit working for pay to stay full-time with her family. Today, a growing number of women and men are rejecting both of these options and creating their own shades of grey, through the use of independent contracting arrangements, as direct sellers and entrepreneurs, and telecommuters.”
The restrictions in AB5 have already damaged a lot of people’s livelihoods, and similar policies in other states or at the national level would spread this damage to people throughout the country. Independent contracting, freelancing, and other alternative work arrangements provide millions of people the income and lifestyle they want. And in a world upended by Covid-19, we’ve seen how valuable it is for people to have multiple income streams and flexible schedules. Government officials should respect these work arrangements and the individuals who choose them, not turn them into outlaws.
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